Saga bosses to enjoy multi-million-pound pay day as reward for presiding over float set to value company's shares at up to £2.5bn

Up for grabs: The float will see between 25 per cent and 58.7 per cent of the company sold to new investors

Bosses at over-50s insurance group Saga will enjoy a multi-million-pound pay day as a reward for presiding over a float set to value the company’s shares at up to £2.5bn.

Saga priced its offer at between £1.85 and £2.45 a share yesterday, in a long-awaited float that will see between 25 per cent and 58.7 per cent of the company sold to new investors.

It aims to raise £550m by issuing new shares while Acromas, which owns 100 per cent of Saga, could sell up to £717m of stock.

Saga’s float prospectus – a door-stopping sheaf of information for potential investors – revealed that executives are in line for huge payouts upon listing.

Chief executive Lance Batchelor will get £1m in cash as soon as the shares start trading, thanks to an agreement signed when he joined from Domino’s Pizza, and a further £1m a year later if he does not resign or get sacked. He will get a further £2m the following year if he stays with the company. Both payments are on top of a pay-and-bonuses package worth up to £2.9m a year.

Executive chairman Andrew Goodsell will be handed shares worth £5m as soon as the company starts trading.

Insiders said the gift would come out of shares owned by CVC, Permira and Charterhouse – the three private equity groups behind Acromas.

The windfall comes on top of an annual pay-and-perks deal worth some £3.1m. And Goodsell also owns 6 per cent of Acromas, meaning that his share of proceeds from the sale of its stake in Saga could be worth up to £43m.

Employees and customers of the group, which sells insurance, financial services, holidays and healthcare, will get priority in the float. They will also get one free share for every 20 they buy, which they will receive after a year.

Customers must sign up for at least £1,000 worth of shares, while employees can ask for a more modest £500 each.

Saga said it plans to use the £550m it raises to pay down its debt to a more sustainable £700m.